They probably aren't going to Paris to see Taylor Swift. But even if Swiftnomics isn't part of the trend, spending by older, higher-income consumers drove the surge in travel in the first quarter, cutting across income and age lines.
A closer look at PYMNTS Intelligence's latest “Last Transaction” analysis of consumer spending patterns in the first quarter shows increases across all age groups in the travel category, with credit card usage increasing compared to the fourth quarter. We found that there was a 24% increase. Older (44+) and high-income ($100,000+) consumers consistently outperform younger and lower-income consumers.
According to the numbers, older, higher-income consumers are on pace to spend $1,202.10 on credit card travel, which was the same level as in the first quarter. This number plummeted to $654 in the second quarter of 2023, but has now recovered to $1061.30.
Credit spending for travel among young high-income earners was $413.30 in the first quarter, up from $222.50 in the fourth quarter of 2022. Seniors with low incomes (less than $100,000) increased their spending dramatically from a low of $39.70 in the third quarter of 2023 to $341.30 in the first quarter of 2023. Young, low-income consumers rose from an average minimum of $106.20 in the third quarter of 2023 to $184.11 in the first quarter.
What's Driving These Trends? PYMNTS Intelligence's view is that older adults' increased use of credit cards to purchase travel offers protection against trip cancellations and fraudulent charges. It is said to highlight the trust they have in their credit providers.
The PYMNTS Intelligence report states, “As many older consumers retire and have more flexibility to travel, differences in spending can be attributed to differences in priorities, financial strategies, and available leisure time. There is also a gender.''
Within these dynamics, and as we consider new dynamics, there are other clues to the surge in travel spending.
Business Travel: Travel spending has increased significantly in recent months, especially among global multinational companies.
As seen on PYMNTS, for the first time since the recovery from the pandemic, large companies outpaced travel growth by small and medium-sized businesses (SMBs), according to American Express Global Business Travel (AmEx GBT).
In the first quarter, Amex GBT reported that global multinational business transaction growth increased by 11% year over year, while small business transaction growth increased by 5% year over year. This growth was particularly strong in sectors such as technology, professional services, pharmaceuticals, mining, energy, and utilities.
Airlines such as Delta Air Lines, United Airlines and Alaska Airlines are also reporting a rebound in corporate travel, with bookings reaching or exceeding pre-pandemic levels. Increased spending by technology companies, as well as a more optimistic economic outlook and a return to office work, contributed to this growth. As a result, airline executives expect demand for business travel to continue to increase in the coming months.
Card-Linked Offers: A recent PYMNTS Intelligence research study conducted in partnership with Banyan shows that travel credit cards are growing in popularity among consumers, especially those with children. Ta.
The study found that nearly 64% of consumers are likely to use a card-linked offer (CLO) for local travel purchases in the next three months, and 60% are likely to do the same for long-haul travel purchases. It turns out that they are planning to use it. These numbers highlight the growing importance of travel credit cards, which offer a variety of benefits, including free travel vouchers, reduced baggage fees, car rental discounts, and free travel insurance.
Intention to use CLOs for travel purchases is even higher among consumers with children in their care, 38% more for long-haul travel and 30% more for local travel awards compared to consumers without children doing. The study also found that travel is consumers' top choice when using CLOs, ahead of other categories such as groceries, streaming subscription services, and personal health.
As a result, travel industry merchants that leverage product-level receipt data to deliver targeted CLOs have the potential to gain a competitive edge in the market and drive increased customer engagement and loyalty. there is.
Buy now, pay later: Another recent report from PYMNTS Intelligence in collaboration with Splitit also adds color to the travel surge. Three in five consumers across all categories say they have used some type of installment payment option at least once in the past year, and 37% of consumers have used BNPL. I answered that there were some things. More than a third used their BNPL to purchase clothing and accessories, 18% used it to purchase groceries, and more than 14% chose their BNPL when paying for travel-related services.
Loyalty programs: Recent reports indicate that rewards programs in the travel sector are becoming more aggressive, potentially increasing consumer travel. The 2023 Travel Loyalty Study from travel technology company Arrivia shows a significant shift in program goals from member acquisition and retention to profitability, with the goal of moving members up the ranks, increasing spending, and creating new benefits and redemptions. The focus is on encouraging the adoption of options.
See more: Baby Boomers, Consumer Insights, Consumer Spending, Credit Cards, Trending News, Gen X, Gen Z, Loyalty, Millennials, News, PYMNTS Intelligence, PYMNTS News, Special Offers, Travel
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